Banks can be founded because the State wants to regulate lending, help the general public and develop the economy. But they can also be opened for purely business reasons: there is money to be made from lending money.
The first Swedish savings bank opened in Gothenburg in 1820. In the 1830s it became legal to open private banks, which functioned as joint stock companies. The business banks could also be called private banks (enskilda banker). Göteborgs Privatbank became the first such bank in Gothenburg in 1848. More banks with a variety of intended customer groups appeared, such as Göteborgs Folkbank (People’s Bank of Gothenburg), which opened in 1871 with a focus on small savers who needed small loans. The insurance companies also offered loans.
It was extremely difficult for an ordinary person or a small business entrepreneur to get a bank loan. They also had to put up some kind of security for the loan. At the beginning of the 1800s this could be goods like tobacco or wine, or even simple things like clothes. Later on, real estate was usually used as security. The loans also involved a lot of paperwork, which could be quite complicated for the borrower. It was not easy to access capital. As a result, informal loan-giving operations emerged alongside the banks.